Economy expands 7.9% in first half

MANILA, Philippines - The economy recorded its best half-year economic growth in 22 years as confidence returned following smooth national elections.

The economy expanded by 7.9 percent in the first six months of 2010, according to the National Statistical Coordination Board, helped by a better-than-expected 7.9 percent growth in the second quarter.

The relatively peaceful turnout of the May elections, improved investor confidence among local investors and the global economic recovery all contributed to the robust second quarter economic performance, said Romulo Virola, secretary general of the National Statistical Coordination Board (NSCB).

The statistics board said the 7.9 percent growth from January to June was the highest half-year expasion since the 9.3 percent posted in the second half of 1988.

However, despite the rosy economic growth for the second quarter, Socioeconomic Planning Secretary Cayetano Paderanga Jr. said the government would still maintain its full-year economic growth projection of five percent to six percent.

He said it’s possible to surpass the six percent growth but declined to provide specific estimates.

“It is likely that full-year GDP growth in 2010 will be leaning towards the upper-end of the five to six percent GDP, perhaps ever higher,” Paderanga said.

He said that given the stronger than expected performance of the industry and services sectors and the robust investment growth in the first two quarter, “it is likely that full year GDP growth in 2010 will be leaning towards the upper end of the five percent to six percent GDP target, perhaps, even higher than that.”

“A higher economic growth is attainable. We will discuss it but for now we will just let it stay there,” Paderanga also said when asked if there would be revisions in the target.

By sector, Industry strongly supported growth, along with Services.

Industry revved up the economy with a double-digit growth for the second consecutive quarter at 15.8 percent supported by Services which posted 6.4 percent.

“Manufacturing sustained its first quarter production in response to the improved domestic and external demand and was shored up by construction, trade, and mining and quarrying,” Virola said.

On the other hand, the agriculture, fishery and forestry declined by three percent for the third consecutive quarter because of poor weather conditions.

On the demand side, increased consumer and government spending, increased investments in construction and durable equipment, and the second consecutive quarter of immense growth in external trade contributed to growth.

As population reached an estimated 93.8 million, per capita GDP rebounded by 5.9 percent, the highest since the second quarter of 2007, from negative 0.8 percent in the previous year.